An institution which does not meet the definition of an institution of higher education contained in Texas Education Code §61.003, is accredited by a Board-recognized accreditor, and is interested in offering degrees or courses leading to degrees in the State of Texas is subject to the restriction on professional degrees in paragraph (1) of this section and must follow the requirements in paragraphs (2) - (5) of this section.
  (1) Restriction on Professional Degrees. The Board may not approve the issuance of a Certificate of Authorization for an exempt institution to grant a professional degree, as defined in §7.3 of this title (relating to Definitions), or to represent that credits earned in this state are applicable toward a professional degree except to the extent allowed for an authorized institution operating under a State Authorization Reciprocity Agreement (SARA).
  (2) Authorization to Offer Degrees or Courses Leading to Degrees in Texas.
    (A) Each institution and/or campus location must submit an application for a Certificate of Authorization to offer degree(s) or courses leading to degrees in Texas. The application form for the Certificate of Authorization may be found on the Board's website. The application must contain the following information:
      (i) Name of the institution;
      (ii) Physical location of campus, or in the case of only providing clinicals or internships in Texas, the physical location of all clinical or internship sites, number of students in clinicals or internships and start and end date of clinicals or internships;
      (iii) Name and contact information of the Chief Administrative Officer of the campus and name and contact information of the designated Single Point of Contact as defined in §7.3 of this chapter (relating to Definitions). In the case of an application based on clinicals or internships, name and contact information of clinical or internship site supervisors;
      (iv) Name of Board-recognized accreditor;
      (v) Level of degree, degree program name, and CIP code as authorized by the Board-recognized accreditor;
      (vi) Documentation of notification to students and potential students of any program which does not make the graduate eligible to take required professional examinations in that field or to practice regulated professions in that field in Texas;
      (vii) Dates of accreditation granted by the Board-recognized accreditor.
        (I) If the institution or a location in Texas is currently subject to a negative or adverse action by its Board-recognized accreditor which has not resulted in a sanction, the institution must provide documentation explaining the reasons for the action and actions taken to reverse the negative or adverse action.
        (II) If the institution or a location in Texas is currently subject to a sanction by its Board-recognized accreditor, the institution must provide documentation explaining the reasons for the action and actions taken to comply with the accrediting agency's standards or criteria, including a timeline for returning to compliance, in order to maintain accreditation.
        (III) If the institution applies based on accreditation of its main campus while seeking final approval for the new Texas-based campus from its Board-recognized accreditor and the Texas Workforce Commission, the institution must provide documentation from its accreditor acknowledging that a decision on campus accreditation can be made within fifteen (15) months of the issuance of a provisional Certificate of Authorization.
      (viii) Acknowledgement of student complaint procedure, compliance with the institutional accrediting agency's standards for operation of institutions, annual review reporting requirements, substantive change notification, and student data reporting requirements contained in this section, §§1.110 - 1.120 of this title (relating to Student Complaint Procedure), §7.4 of this chapter (relating to Standards for Operation of Institutions), §7.11 of this chapter (relating to Changes of Ownership and Other Substantive Changes), and §7.13 of this chapter (relating to Student Data Reporting), respectively;
      (ix) Texas Workforce Commission Certificate of Approval or a Texas Workforce Commission exemption or exclusion from Texas Education Code, Chapter 132;
      (x) Disclosure of most recent United States Department of Education financial responsibility composite score, including applicable academic year for score. If the institution has a score under 1.5, the institution must provide documentation of all actions taken since date of calculation to raise the score.
      (xi) Documentation of reserves, lines of credit, or surety instruments that, when combined with tuition and fee receipts, are sufficient to allow the institution to fulfill its educational obligations for the current term to its enrolled students if the institution is unable to continue to provide instruction to its enrolled students for any reason. Such documentation must meet requirements as defined in §7.16 of this subchapter (relating to Financial Protections for Student Tuition and Fees).
    (B) Board staff will verify information and accreditation status. Upon determination that an institution is in good standing with its Board recognized accreditor, has sufficient financial resources, and, if applicable, has provided sufficient documentation of correcting accreditation or financial issues, Board staff will provide a Certificate of Authorization to offer in Texas those degrees or courses leading to degrees for which it is accredited. If an institution is only providing clinicals or internships in the state of Texas, a Certificate of Authorization will be issued for the institution to offer in the state of Texas identified clinicals or internships in connection with those degrees or courses leading to degrees for which the institution is accredited. The Certificate of Authorization will be issued to the institution by name, city and state.
    (C) Certificates of Authorization are subject to annual review for continued compliance with the Board-recognized accreditor's standards of operation, student complaint processes, financial viability, and accurate and fair representation in publications, advertising, and promotion.
      (i) Institutions must submit the following documentation on an annual basis for Board staff review and recommendation to the Board for continuation or revocation of the Certificate of Authorization:
        (I) Annual audited financial statements, issued less than one year from time of submission, prepared in accordance with Generally Accepted Accounting Principles by an independent certified public accountant;
        (II) Documentation of reserves, lines of credit, or surety instruments that, when combined with tuition and fee receipts, are sufficient to allow the institution to fulfill its educational obligations for the current term to its enrolled students if the institution is unable to continue to provide instruction to its enrolled students for any reason. Institutions under a Certificate of Authorization as of September 1, 2017 are required to provide documentation of reserves, lines of credit, or surety instruments going forward with the 2019 annual compliance review.
        (III) Certification that the institution is providing accurate and fair representation in publications, advertising, and promotion, including disclosure to students and potential students of any program which does not make the graduate eligible to take required professional examinations in that field or to practice regulated professions in that field in Texas. The institution shall further certify that it is maintaining any advertising used in Texas for a minimum of five years and shall make any such advertisements available to the Board for inspection upon request.
        (IV) An annotated copy of the student catalog or student handbook showing compliance with the principles addressed in §7.4 of this chapter with cross-reference to the operational standards of its institutional accrediting agency;
        (V) A copy of the institution's student complaint policy, links to online student complaint procedures and forms, and summary of all complaints made by Texas residents or students enrolled at a Texas-based institution concerning the institution in accordance with §§1.110 - 1.120 of this title. The complaint summary shall include complaints which have been filed, with the institution, its accrediting agency, or the Board within the 12 months prior to the annual review reporting date and shall indicate whether pending or resolved;
        (VI) Official statement of current accreditation status and any pending or final actions that change the institution's accreditation status from the institution's Board-recognized accreditor, including changes in degree levels or programs offered approvals, changes in ownership or management, changes in name, and changes in physical location within the 12 months prior to the annual review reporting date;
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(VII) Information regarding heightened cash monitoring or other changes that affect students' federal financial aid eligibility through the US Department of Education;
        (VIII) Attestation that all documentation submitted is true and correct and continued acknowledgement of student complaint procedure, annual review reporting requirements, substantive change notification, and student data reporting requirements contained herein this section, §§1.110 - 1.120 of this title, §§7.4, 7.11, 7.13, and 7.15 of this chapter, respectively.
      (ii) Annual reviews are conducted based on an institution's name and initial date of authorization.
        (I) Institutions with names starting with "A" through "O" must submit annual review documentation by January 15 of each year. The Board will review staff recommendations at the annual July Board meeting.
        (II) Institutions with names starting with "P" through "Z" must submit annual review documentation by July 15 of each year. The Board will review staff recommendations at the annual January Board meeting.
        (III) Institutions that have received their first Certificate of Authorization less than six months from the due date for submission of annual review documentation may wait to submit documentation until the following annual review submission date.
      (iii) Prior to making a recommendation to the Board, staff has discretion to conduct a site visit at the institution if warranted by facts disclosed in the annual review documentation. The Board-recognized accreditor will be notified and invited to participate.
    (D) Certificates of Authorization for institutions offering degrees or courses leading to degrees at a physical location in Texas, upon Board staff recommendation after annual review, expire at the end of the grant of accreditation by the Board-recognized accreditor.
      (i) If a new grant of accreditation is awarded by the Board-recognized accreditor, the Certificate of Authorization may be renewed upon submission of documentation of the new grant of accreditation.
      (ii) If an institution changes recognized accreditors, the institution must submit a new application for a Certificate of Authorization.
    (E) Certificates of Authorizations based solely on providing clinicals or internships in Texas expire one year from date of issuance.
      (i) If clinicals or internships are ongoing in Texas, the Certificate of Authorization based solely on providing clinicals or internships in Texas must be renewed on an annual basis. At least thirty (30) days, but no more than ninety (90) days, prior to the expiration of the current Certification of Authorization, an institution, if it desires renewal, is required to provide updated information regarding the physical location of all clinical or internship sites, number of students in clinicals or internships, and the start and end date of the clinicals or internships.
      (ii) The Board shall renew the Certificate of Authorization based solely on providing clinicals or internships in Texas if it finds that the institution has maintained all requisite standards.
    (F) Certificates of Authorization for Texas-based campuses which are provisionally-granted based on their main campus' accreditation expire at the end of fifteen (15) months.
      (i) If accreditation has not been achieved by the expiration date, the provisionally-granted Certificate of Authorization will be withdrawn, the institution's authorization to offer degrees will be terminated, and the institution will be required to comply with the provisions of §7.8 of this chapter (relating to Institutions Not Accredited by a Board-Recognized Accreditor).
      (ii) Subsequent provisionally-granted Certificates of Authorization will not be issued.
      (iii) At least ninety (90) days prior to expiration of the certificate, institutions operating under a provisionally-granted Certificate of Authorization must submit either an application for a Certificate of Authorization under this section or an application for a Certificate of Authority under §7.8 of this chapter.
    (G) Institutions under an existing Certificate of Authorization must immediately notify the Board if the institution or its main campus becomes subject to a sanction by its Board-recognized accreditor. The institution must provide documentation explaining its current status and actions taken to comply with the accrediting agency's standards or criteria, including a timeline for returning to compliance, in order to maintain accreditation.
  (3) Restrictions Placed on Institution under Sanctions by Its Accreditor.
    (A) If an institution is under sanctions by its accreditor, limitations appropriate for the sanction shall be placed upon the institution's Certificate of Authorization. Limitations may include, but are not limited to:
      (i) Restrictions on adding degree programs to its authorization;
      (ii) An increase in the amount of financial reserves, lines of credit or surety instrument required to maintain a Certificate of Authorization; and
      (iii) Review every six months, including unannounced site visits.
    (B) The Board will notify the institution via letter of all restrictions placed upon its Certificate of Authorization due to its accreditors' sanctions.
    (C) The Board will place a notice of all sanctions placed upon an institution via the Board's website.
    (D) Restrictions and public notification will be removed upon written documentation from the institution's accreditor that all sanctions have ended.
  (4) Grounds for Revocation of any Certificate of Authorization.
    (A) Institution no longer holds a Certificate of Approval or Letter of Exemption issued by the Texas Workforce Commission.
    (B) Institution loses accreditation from Board-recognized accreditor.
    (C) Institution's Accreditor is removed from the U.S. Department of Education or the Board's list of approved accreditors.
      (i) If the institution's Certificate of Authorization is revoked due to its accrediting agency's removal from the U.S. Department of Education and/or the Board's list of approved accreditors, the Board, or Board staff as delegated, shall set a provisional time period within which institutions may continue to operate, not to exceed any provisional time period set by the United States Department of Education.
      (ii) If the institution's Certificate of Authorization is revoked due to its accrediting agency's removal from the U.S. Department of Education or the Board's list of approved accreditors, a request to extend its Certificate of Authorization for the provisional time period set under paragraph (3)(C)(i) of this section, must be submitted to the Commissioner within ten (10) days of publication, by either the U.S. Department of Education or the Board, of such revocation.
    (D) Institution fails to comply with data reporting, substantive change notification requirements, or annual review reporting requirements.
    (E) Board staff recommends revocation based on deficiencies in compliance with the principles addressed in §7.4 of this chapter as evidenced by lack of compliance with the Board-recognized accreditor's standards, which are found in annual review documentation and not corrected by the institution upon request by Board staff.
    (F) Institution offers degrees for which it does not have accreditor approval.
  (5) Process for Removal of Authorization.
    (A) Commissioner notifies institution of grounds for revocation as outlined in paragraph (3) of this section unless paragraph (3)(C) of this section applies and the Board sets a provisional time period for compliance.
    (B) Upon receipt of the notice of revocation, the institution shall not enroll new students and may only grant or award degrees or offer courses leading to degrees in Texas to students enrolled on the date of notice of revocation until it has either been granted a Certificate of Authority to grant degrees, or has received a determination that it did not lose its qualification for a Certificate of Authorization.
    (C) Within ten (10) days of its receipt of the Commissioner's notice, the institution must provide, as directed by Board staff, one or more of the following:
      (i) proof of its continued qualification for the exemption; or
      (ii) submit data as required by §7.13 of this chapter; or
      (iii) a plan to correct any non-compliance or deficiencies which lead to revocation; or
      (iv) a plan to seek new Board-recognized accreditation; or
      (v) written intention to apply for a Certificate of Authority within 60 days of the notice of revocation; or
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(vi) a written teach-out plan, which must be approved by Board staff before implementation.
    (D) After reviewing the evidence, the Commissioner will issue a notice of determination, which in the case of an adverse determination, shall contain information regarding the reasons for the denial, and the institution's right to a hearing.
    (E) If a determination under this section is adverse to an institution, it shall become final and binding unless, within forty-five (45) days of its receipt of the adverse determination, the institution invokes the administrative remedies contained in Chapter 1, Subchapter B of this title (relating to Dispute Resolution).
    (F) If a determination allows the institution to continue operating, a new Certificate of Authorization will be provisionally-granted. Provisions for continued operation under the new Certificate of Authorization may include, but are not limited to:
      (i) requirements to provide updates to Board staff on a monthly basis;
      (ii) continued progress toward full compliance with all Board rules and requirements;
      (iii) continued progress toward new Board-recognized accreditation, if applicable, or toward approval for a Certificate of Authority; and
      (iv) other requirements imposed by the Board.
    (G) Certificates of Authorization which are provisionally-granted after a notice of revocation continue only as long as the institution complies with all such provisions.
  (6) Closure of an Institution.
    (A) The governing board, owner, or chief executive officer of an institution that plans to cease operation shall provide the Board with written notification of intent to close at least ninety (90) days prior to the planned closing date.
    (B) If an institution closes unexpectedly, the governing board, owner, or chief executive officer of the school shall provide the Board with written notification immediately.
    (C) If an institution closes or intends to close before all currently enrolled students have completed all requirements for graduation, the institution shall assure the continuity of students' education by entering into a teach-out agreement with another institution authorized by the Board to hold a Certificate of Authority, with an institution operating under a Certificate of Authorization, or with a public or private institution of higher education as defined in Texas Education Code §61.003. The agreement shall be in writing, shall be subject to Board approval, shall contain provisions for student transfer, and shall specify the conditions for completion of degree requirements at the teach-out institution. The agreement shall also contain provisions for awarding degrees.
    (D) The Certificate of Authorization for an institution is automatically withdrawn when the institution closes. The Commissioner may grant to an institution that has a degree-granting authority temporary approval to award a degree(s) in a program for which the institution does not have approval in order to facilitate a formal agreement as outlined under this section.
    (E) The curriculum and delivery shall be appropriate to accommodate the remaining students.
    (F) No new students shall be allowed to enter the transferred degree program unless the new entity seeks and receives permanent approval for the program(s) from the Board.
    (G) The institution shall transfer all academic records pursuant to §7.15 of this chapter (relating to Academic Records Maintenance, Protection, and Repository of Last Resort).
    (H) The Coordinating Board has delegated its authority to approve institution closure arrangements and agreements to the Assistant Commissioner with oversight of the closing institution.

Source Note: The provisions of this §7.7 adopted to be effective December 6, 2009, 34 TexReg 8515; amended to be effective May 26, 2010, 35 TexReg 4152; amended to be effective November 29, 2010, 35 TexReg 10497; amended to be effective February 26, 2013, 38 TexReg 1152; amended to be effective August 15, 2013, 38 TexReg 5070; amended to be effective November 23, 2016, 41 TexReg 9113; amended to be effective February 28, 2018, 43 TexReg 1068; amended to be effective March 2, 2020, 45 TexReg 1395; amended to be effective November 11, 2021, 46 TexReg 7600